Amazon Helps Slash Video Costs

Last week brand-new video startup was named a finalist in Amazon’s Start-Up Challenge, one of seven in the running for $100,000 in cash and Amazon Web Services credits and a possible investment from Amazon. Resource-intensive video startups have a pretty good record in the competition — if you can say such a thing for a one-year-old event. Last year video platform Ooyala took home the grand prize, and was a finalist.

Denver-based uses on-demand cloud computing to enable pay-as-you-go video encoding (translation: transforming an uploaded file from whatever format it comes in into a clip fit to play on the Internet, mobile or elsewhere). Whereas other costs like content delivery are being commoditized, encoding is still a hassle. What most people do is set up servers to run software like FFmpeg or On2‘s Flix, or buy dedicated appliances from companies like RipCode.

But by supplementing its own internal server farm with Amazon elastic computing, can adjust to usage spikes, and altogether take 30 to 40 percent off the cost of running your own server farm, according to founder Greggory Heil.

On-demand may be a differentiator now — and was quick to come to market after being founded in June of this year — but competition is imminent. On2 announced last week it would partner with Zencoder to offer an on-demand encoding direct competitor.

Another challenge is that the biggies like YouTube already have their encoding infrastructure set up in-house, and are unlikely to outsource to a startup. But with also-ran players looking to cut costs, could pick up a few large sites. For now, its most notable customers are college reviews site Unigo, film production video site MovieSet (our coverage), and extreme sports video platform Mobilerider.

Heil said has six employees and is self-financed.

Next up in the startup challenge: Each of the companies is visiting Amazon in Seattle to present in person. The final decision will be made by a panel of judges.